Scandal

By Haynes JohnsonSeptember 3, 1978

Once upon a time there was a government official named Swartwout. He was the Collector of the Port of New York, long before the Civil War. Swartwout's name survives in history for an unflattering reason. He was one of the first of a long line of officials to plunder the public till on a grand scale. When Swartwout fled to Europe, he carried more than a million dollars in stolen loot with him.

Compared to the crooks who followed him, Swartwout was a piker. For instance, The New York Times of July 8, 1871:

"Reliable and inconvertible evidence of numerous gigantic frauds on the part of the rulers of the city has been given to the public from time to time. Few, if any, of the frauds, however, which have been thus exposed will be found to be of greater magnitude than those which are presented in this article. The facts which are narrated are obtained from what we consider a good and trustworthy source, and the figures which help to explain them are transcribed literally from the books in the Controller's office, If Controller Connolly can prove them to be inaccurate he is full heartily welcome to do so."

That was the way The Times began, in leisurely 19th century style, its expose of the Boss Tweed Ring in New York.

What the good Boss and his gang had done was pilfer somewhere between $75 and $200 million from the city treasury. They accomplished that massive piece of corruption in what has become the accepted American style - by fraudulent accounts of government contracts. Buildings were rented at extraordinary inflated prices as city armories, and stood locked and unused. Then the gang would fake repairs and maintenance work on the armories. In a 30-day period alone more than a half million dollars was paid out by the city treasury for "repairs on armories and drill rooms." The gang got the money, of course.

Phony leases, padded bills, false vouchers, unnecessary repairs, large-scale kickbacks - all these were the standard operating procedures of the day. On one grand day of classic corruption, the ring billed the city for $129,469.48 in furniture supposedly supplied for city buildings.

Other great government scandals followed in the wake of the Tweed Ring's example, as corruption moved south and flowered in Washington during the Grant administration. In the Whiskey Ring scandal the government was cheated out of millions when distillers, wholesale liquor dealers and employes of the internal revenue conspired to avoid payment of the federal liquor tax. In the Credit Mobilier scandal, senators and representatives accepted stock in the company organized to build the Union Pacific Railroad in return for the votes. In the navy scandals, the secretary of the navy was accused of making double payments to contractors in a kickback scheme.

Then, in more contemporary times, there were scandals involving the Harding gang in the 1920s.

But all these, we're now told, are small stuff compared to what has been going for years, maybe decades, in Washington. It's conservatively estimated that the government has been cheated out of about $66 million a year arising from corruption existing since at least the early 1960s. The General Services Administration scandals of the present involve, U.S. investigators say, perhaps the greatest amount of money ever.

The method employed is as familiar as apple pie. Employes of GSA, the federal government's housekeeping agency that oversees buildings and supplies, everything from pencils to computers, have been ripping off the public systematically and boldly by charging for repairs never done, supplies never delivered; maintenance never completed, and other sundry old-style acts of corruption - bribery, kickbacks, padded costs for equipment.

Shades of Swartwout and Boss Tweed, and right here in Jimmy Carter's Washington. Not that this is Carter's problem, although it's a made-to-order issue for him: proof he was right in wanting to reform the way government works.

What's most important about the GSA scandal is not that they exist. Government grafters, as we've seen, are hardly new. It's how pervasive they are, and how they have managed to operate on such a great scale for so long, that count.

For corruption to prosper so successfully - an apparently so openly - indicates a major breakdown in all the investigative and enforcement arms of the government. The inspector general offices, the General Accounting Office, the FBI - all clearly have failed to detect and stop corruption literally all around them in offices where they work.

Nothing better illustrates the problems over performance of the federal government. And nothing better demonstrate how long it takes and how difficult it is for the government to police itself and effectuate change.

Probably the most singular face about the GSA scandals is that they come as no real surprise - and that they certainly come as no surprise within the federal government itself. Yet only now are corrective actions being taken.

Eight years ago, Ronald Kessler, a reporter for The Washington Post, wrote the first of his extensive articles about serious problems within GSA. That lengthy Page One report of Aug. 9, 1970 described how a former $16,000-a-year GSA leasing chief wound up as a 2 percent owner of a just completed $34 million office building leased to GSA a year or so after the former chief left his government job.

In the years since, Kessler has kept digging into land deals, trades of productive government property for massive unused structures, building loans and questionable leases, all involving GSA. The stories were duly printed, fulled with damaging information and embarrassing questions, but no public outcry - and no real government action. It was in this period, too, that massive abuses of the government's hiring policies were documented. Political favoritism and "must" job referrals from powerful members of Congress were rampant. GSA was shown to be one of the more notorious and blatant agencies in this regard. Still no outcry, still no real government action.

Nor was it hard to pinpoint problems concerning GSA. This reporter vividly recalls walking into federal government offices and hearing manager after manager utter virtually the same complaints.

"If you were to ask me what at the largest barriers you have to overcome in order to do an efficient job," one of them said in New York, "you know what my answer would be? The Civil Service Commission and the General Services Administration. These agencies do not serve us. They're there, but they're there to block us. It's like they're in business for themselves. And their sole preoccupation is to keep themselves in power without rendering service."

Then he said: "That's the frustration when you're in the government dealing with the government."

And that's the real GSA scandal - that until now the federal government has been unable to check illegal operations within its own doors that are even worse than the actions of all those public plunderers of old.